As an investor, do you have more to offer besides giving money? And as a startup, how can investors help grow your business? Here is a positive encounter with one of the startups my husband and I have invested in.
Joukon Voima, the crowdfunding platform for sustainable energy projects, invited me to a closed equity funding round. This was not the first time we have invested in a start-up. While a majority of our family’s savings are invested in traditional stocks and funds, we have done small equity crowdfunding in the following startups: Beibamboo, Claned, Invesdor, Lekane, Uplause and Zipuli.
As a shareholder, it is normal to get invited to Annual General Meetings. I’ve also received discounts from many of the above mentioned startups to buy their services or products. With quieter startups, I might get an investor newsletter once a year.
After saying yes to Joukon Voima and wiring the money in February, I heard from them again in April. An invitation to Joukon Voima investors’ meetup! This was the first time when any of our portfolio companies have invited us to meet other investors.
As a working mom, I try to choose only a few social engagements per week, but I trusted that the Joukon Voima team would make my time worthwhile. And above anything, I was curious to meet the other investors.
At the meeting, we, the investors, did not know each other before hand, so it felt almost like a group blind date. The dynamics worked surprisingly well. Nobody was there for an ego-trip, everybody had the company’s best interest in mind. The Joukon Voima team trusted us to reveal their thinking and logic behind their past and future decisions.
The best part of the meeting was sparring for ideas, digging into Joukon Voima’s business angles and enjoy an honest, open dialogue together. Seeing the company’s willingness to listen and learn, I then had a stronger faith in the team. It was a fun two hours spent with an interesting group. I was delighted that the company wanted to use all the resources available i.e. their investors’ money and mind. And guess what, they even sent a follow-up email. – Now I really have a soft spot for any kind of follow-ups.
Don’t be lazy
I’ve once been in an event where the CEO of one of the startups we’ve invested in complained that they haven’t gotten help from their investors at all.
Well, they never asked. There were no meetup requests, no discussion forums, no calls, not even one personal email – a bit lazy to send a group email about the next funding round after radio silence, don’t you think?
And you might think, hey, why don’t investors offer their competence proactively? They do and I have too. However I’ve noticed that people don’t like unsolicited advice. Nowadays I offer my support only when asked – unless you are my dear friend, then I will stick around until you say yes.
So startups, think about how to maintain your relationship with investors. All relationships need work and it is wasteful to spend a lot of time in fundraising aka dating phase but then forget your investors after the contract is signed. Here are three questions to ask yourself:
- Do you know who your investors are and why they invested in you?
- Do you know your investors’ competence, expertise and networks?
- Is your business in a stage where you could benefit from support from your investors?
I understand that if you have many investors, it seems impossible to create a more meaningful relationship with each and one of them. You want to do business, not spend all your time with investors.
However, it is pure laziness not to tap into the enthusiasm, competence and network of your investors. Especially if you’ve raised funds through crowdfunding (or you’re in the business). Joukon Voima acted as they preached, they took the risk and used the principles of crowdsourcing in their engagement with investors.
Step towards a happy ending
All investments are risky, especially investing in startups, which basically in most cases does not give you a return on investment (and you might even lose the invested money). Personally, I like having fun doing business development. In this case advising the team with other investors was a big (emotional) bonus.
So startups, facilitate, coordinate and be focused on what you expect from your investors and communicate it to them. It can be a mailing list, a meetup, a discussion forum, a sauna evening, regular calls, a hiking trip or even a VIP vis-à-vis with each and every investor. It requires work, but if done properly, you will get more than your money’s worth.